Kentucky: Air Supremacy In The Bluegrass State

With Amazon’s decision to put its $1.5-billion hub in Hebron, Kentucky is on the runway to establish itself as the global airfreight logistics leader.

May 25, 2017

Kentucky: Air Supremacy in the Bluegrass State

By the BF StaffFrom the March/April 2017 Issue

Amazon’s announcement early this year that it would invest nearly $1.5 billion to establish a centralized air hub in Northern Kentucky would have been a big win for any state. For Kentucky, the decision cemented the state’s position as one of the dominant air shipping hubs in the world.

More than 2,000 Amazon workers will call Hebron in Boone County home when all is said and done, as the world’s largest e-commerce retailer sets its sights on also becoming one of the world’s largest and most efficient shippers.

Amazon aims to build its new Prime Air hub in Hebron, KY into a global competitor to FedEx and UPS.

“As we considered places for the long-term home for our air hub operations, Hebron quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations and an excellent quality of living for employees,” said Dave Clark, Amazon senior vice president of worldwide operations. “We feel strongly that with these qualities as a place to do business, our investments will support Amazon and customers well into the future. We couldn’t be more excited to add 2,000-plus Amazon employees to join the more than 10,000 who work with us today across our robust operations in Kentucky.”

Last year, Amazon entered into agreements with two carriers to lease 40 cargo airplanes dedicated to support Prime members with fast, free shipping. Today, 16 of those planes are in service for Amazon customers with more planes rolling out over time. Amazon’s Prime Air hub at the Cincinnati/Northern Kentucky International Airport (CVG) will support the company’s dedicated fleet of Prime Air cargo planes by loading, unloading and sorting packages.

Gov. Matt Bevin, who was actively involved in the negotiations, called it a signature win for his state.

“Given our already existing strength in the areas of logistics and distribution with UPS and DHL, Amazon’s decision further solidifies Kentucky as the leading global logistics center in North America,” said Gov. Bevin. “In terms of economic impact, we calculate the project will create several thousand direct and indirect jobs.”

No one was happier to receive the news from Amazon than Candace S. McGraw, CEO of the CVG Airport.

“We’ve worked hard to ensure CVG is a great place to do business and we couldn’t be more pleased that Amazon recognized those efforts with plans to build a top-in-class air cargo hub at our airport,” she said. “A vibrant airport improves the economic vitality of the region, and adding thousands of new jobs through establishing this hub at CVG will certainly be transformational for the local economy and local businesses.”

Terry Gill Jr., secretary of the Kentucky Cabinet for Economic Development, said that Kentucky’s historic leadership position in logistics was another deciding factor.

“Before adding job number one at Amazon’s Prime Air hub, our thriving distribution and logistics industry already captured the eyes of the world. Now we have its complete attention,” Gill said. “For decades, Kentucky’s distribution and logistics industry has been one of the state’s pillars, employing more than 50,000 people full time at 400-plus facilities. As the Prime Air hub substantially comes on line in the coming years, increasing the industry’s jobs, infrastructure and resources, we fully expect a new wave of interested companies considering locations and expansions in the Northern Kentucky region and beyond. Kentucky can now easily be considered a critical hub for air logistics, not just for the United States, but also for the world.”

Amazon is not the only company investing serious capital and creating a plethora of jobs in the Bluegrass State’s distribution sector.

Major investors include DHL, which in 2015 announced a substantial expansion of its hub at the Cincinnati/Northern Kentucky International Airport (CVG), its eighth since 2009. That adds up to investments totaling $281 million. In Louisville, UPS recently announced a $309 million expansion of its Centennial ground package sorting facility near its WorldPort shipping hub.

FedEx, which maintains operations across the commonwealth including a distribution station in Paducah and a freight operation in London in Eastern Kentucky’s Laurel County, is in growth mode as its package volume doubled in the past decade. FedEx’s other Kentucky facilities include a 500-employee ground package operation in Northern Kentucky, an expanding freight facility in Lexington and its new East Louisville Ground Station, opened in 2016. From its East Louisville facility, FedEx Ground offers one-day service as far south as Birmingham, north to the Wisconsin border and east to Pittsburgh.

Distribution and logistics facilities are finding Kentucky homes not only in the state’s most populated cities, but also across the commonwealth. In 2016 alone, Kentucky saw more than 1,800 new full-time jobs announced in its distribution and logistics industry with projects across the state totaling $541 million.

The air supremacy Kentucky enjoys is just one additional strategy being employed by Gov. Bevin to make Kentucky even more attractive to business.

“Improving Kentucky’s business climate is a top priority for our administration,” Gov. Bevin said. “We’ve worked diligently on this from day one, introducing measures to cut red tape, as well as creating initiatives and providing dollars to improve the job readiness and training of our workforce. I remain passionately committed to making Kentucky the nation’s most business-friendly state. If you like the kind of positive progress we have made thus far, keep your seatbelt fastened, because there is much more to come!”

TENN-TOM: CENTRAL ARTERY FOR SHIPPING

The Tennessee-Tombigbee Waterway (commonly referred to as the Tenn-Tom) is a 234-mile Waterway that connects seventeen states to the Gulf of Mexico and the world. Providing access to more than 16,000 miles of navigable, inland waterways in the United States, it is the shortest distance from mid-America to the Port of Mobile located in Alabama at the heart of the Gulf of Mexico. The boating distance from Knoxville, Tennessee to the Gulf of Mexico is reduced by more than 665 miles by using the Tenn-Tom. The Tenn-Tom has available capacity and is open to new business and industry along the waterway.

With shovel ready industrial and port sites available and state and local economic development organizations ready to assist, the Tenn-Tom can accommodate any company interested in locating on the waterway. Communities along the Tenn-Tom are business friendly and offer great incentives to locate in their areas and offer a skilled and available workforce. Recent announcements have credited this attitude and willingness to work with site selection developers, along with location on the Tenn-Tom, as key factors that persuaded them to choose a site on the Tenn-Tom.

The steel industry is only one example of those taking advantage of the Tenn-Tom and its regional resources. Access to abundant power and natural gas resources is a significant advantage for companies. The coal, steel and chemical industries have and are realizing the benefits of waterborne transportation.

By using the waterway, manufacturers take advantage of the most energy-efficient, safest and environmentally friendly mode of transportation. Industry can ship more cargo using less energy with lower emissions while saving dollars. With less trucks on the highways, the roads are much safer, and better for the environment due to less accidents and spills. These cost saving advantages are not only important to you as an investor but also your global customers and to everyone as consumers of these products.

The Tenn-Tom serves a full range of public ports and terminals throughout the region that provide a full range of intermodal services and warehousing. With a standing Memorandum of Understanding with the Panama Canal, the Tenn-Tom is uniquely positioned to serve an increasing trade market with the world’s foreign markets. The expanded Panama Canal, completed in June 2016, will drive more trade in the Gulf and the Eastern Seaboard. The Port of Mobile in Alabama, has a world class 850,000 TEU container port already in operation and, this along with the Tenn-Tom’s designation as Marine Corridor (M-65) by the United States Department of Transportation, makes the waterway “shovel ready” for Containers-on-Barge. Once established, containers on barge can go up the connecting Tennessee River to Paducah, Kentucky and markets beyond.

With unlimited recreational opportunities, the waterway has become a way of life. Boating, sport fishing, hunting and camping are some of the ways that people use the Tenn-Tom. The “Loopers” use it for their sojourns thru mid-America across to the Eastern Seaboard, around Florida and back to the Gulf. Bass and crappie tournaments have drawn worldwide attention.

With all this available as a draw to the region, it is not surprising that an eager and ample work force is available in an enviable business climate.

Billions of dollars have been invested in the Tenn-Tom corridor and much more is on the way. For more information, please contact the Tennessee-Tombigbee Waterway Development Authority at 888-Tenn-Tom or visit www.tenntom.org.

The tactical elements of physical security programs often get the most attention, at the expense of strategic factors. - Read: The Invisible Failure Of Facility Security Programs at FacilityExecutive.com.

Ecotrak makes it safer and easier to monitor radon gas in soil, providing quick and reliable information after one to seven days of observation. - Read: Ecotrak Monitors Radon Gas in Soil at FacilityExecutive.com.

Location Spotlights

E-News Signup

Join 20,000+ Subscribers & Get the latest from Business Facilities!

Business Facilities highlights area economic development and site selection news from around the world. Economic development creates opportunities to grow state, local and metro areas, which are essential for economic growth, improved quality of life and community development.

Business Facilities is a leading full-service media brand specializing in the site selection marketplace. Through a bi-monthly magazine, e-mail newsletters, a news portal, and its LiveXchange event, Business Facilities has created a dynamic community for C-level executives and economic development organizations.